All eyes are on Fed Chairman Jerome Powell's speech at the Jackson Hole Summit today. Investors are keen to know the details on Fed's plans of tapering back on the stimulus program.
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It is a Jackson Hole meeting. It's not the Federal Open Market Committee (FOMC) meeting. But why is it that it is so widely watched?
Of course, today itself, we are going to watch whether Jerome Powell says anything about tapering or reducing bond purchases.
Jackson Hole has been the place where previous big announcements have come and that's why the world is waiting and watching.
In 2012, Ben Bernanke (Former Chair of the Federal Reserve of the United States) announced the third tranche of quantitative easing at Jackson Hole before it was formalised in the September FOMC meeting that year.
In 2014, Mario Draghi (the current Prime Minister of Italy), warned of falling inflation expectations in Europe and that was the precursor for quantitative easing in Europe. So it's not just US central bankers; central bankers of the world announce over there.
The most boring Jackson Hole meeting was last year’s because it was only a virtual meeting. It was the first virtual meeting ever at Jackson Hole.
Also Read: Jackson Hole Economic Symposium: Place where central bankers meet; here's why global investors are interested
Another important meeting for all of us was in 2005, when Raghuram Rajan, as the International Monetary Fund’s (IMF) chief economist, alerted that banks were seriously undercapitalised and fragile. And in a way, he pointed to the Lehman crisis of 2008.
So Jackson Hole holds so much importance, but what now?
Watch the accompanying video of CNBC-TV18’s Latha Venkatesh for more details.